Why The Chances of China Joining ACTA Or TPP Are Practically Zero

from the why-on-earth-would-it? dept

As Michael Geist and others have pointed out, ACTA is the Anti-Counterfeiting Trade Agreement without the main sources of counterfeits being involved -- notably, China. This has required some skilful footwork on the part of ACTA supporters, who need to justify the ratification of a loosely-worded treaty with potentially harmful effects on Internet service providers, civil liberties and developing countries, but which doesn't provide the key benefit claimed in its name.
Here's how the European Union's representatives tried to deal with this issue in a "statement on IP Enforcement Trends" made at the WTO Council for TRIPS:

ACTA is an agreement between a limited number of countries.

But it is a significant first step. It establishes a nucleus of countries that are committed to the highest standards of intellectual property rights enforcement. A nucleus that will grow. The World Trade Organisation had a different name, a weaker structure and only nine members when it started out in 1948. After Russia’s accession later this year, nearly all world trade will be bound by its rules.

We would have liked to have negotiated this agreement at a global level. That was not possible. But the countries who have joined us in this agreement will soon begin to see the benefits of good enforcement, in terms of investment and in terms of innovation.

Since the vast majority of ACTA's participants already have "good enforcement", the last sentence only makes sense if it's referring to signatories like Mexico and Morocco. So is the EU seriously claiming that ACTA is going to lead to a flood of investment in those nations? If so, when? Immediately? In ten years? All-in-all, it seems a pretty dubious metric for the success of ACTA, and a poor incentive for others to join.

That's especially the case for China, which probably needs investment less than any nation on earth, since its currency reserves are currently around the $3 trillion mark. But even if external investment isn't much of an incentive, maybe there are others.

That wasn't the case back in 2010, when China was unconvinced about the value of ACTA:

Causing particular concern to them [India and China] is the draft Anti-Counterfeiting Trade Agreement (ACTA) being negotiated by Australia, Canada, the EU and its 27 member states, Japan, Rep.Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the US.
Briefly, China's and India's lengthy statements argued that ACTA and other agreements could:

Undermine the balance of rights, obligations and flexibilities that were carefully negotiated in the various WTO agreements

Distort trade or create trade barriers, and disrupt goods in transit or transhipment

Undermine flexibilities built into TRIPS (such as for public health, and trade in generic medicines)

Undermine governments’ freedom to allocate resources on intellectual property by forcing them to focus on enforcement

Of course that was two years ago, and ACTA has changed during that time. Perhaps China is more positive about it now. This is how it felt last week, when it was at that same WTO Council for TRIPS meeting:

China said many provisions of ACTA go beyond the TRIPS provisions.

Still not happy, apparently. But maybe China doesn't like the Western bias of ACTA, which basically consists of the US and the EU, plus a few other smaller nations thrown in to give a semblance of globalization. Perhaps China will join TPP instead?

For evidence of China's vision for an integrated East Asian political economy -- binding China, Japan, and Korea -- look at remarks of China's Commerce Minister yesterday in Beijing. Speaking at a press conference during the ongoing Chinese National People's Congress, Minister of Commerce Chen Deming's said of that Japanese entry into negotiations of the Trans-Pacific Partnership (TPP) trade pact, if it happens, "Should not be allowed to influence progress on other types of cooperation in the East Asian region."

Translation: Japan should give priority to and focus first on the talks being promoted by Beijing to create a regional Free Trade Agreement (FTA) which would closely bind China, Japan, and Korea.

In other words, far from contemplating joining TPP -- and thus helping to address the same issues about that treaty failing to deal with counterfeiting in the same way that ACTA fails -- China clearly wants to promote its own regional Free Trade Agreement (FTA) for leading East Asian nations. One reason is that China would be the clear economic heavyweight of that group, not the US as in ACTA or TPP.

That's the key problem with the ACTA proponents' vague hope that China will one day join a treaty it had no input on and which aims to shut down parts of its economy: ACTA would not only diminish China's sovereignty in terms of limiting what laws it could pass, it would also undermine its attempts to strengthen China's position as the undisputed regional leader in South-East Asia.

There is simply no benefit for China to join ACTA or TPP; and without China, both become largely pointless exercises.

ACTA and TPP are not in China's interest at the moment, because they are still a net CONSUMER of IP, and not a net PRODUCER. However, just like Japan of the 60s and 70s, they will reach a point where their ideas and their IP is valuable, more than valuable enough to "steal", and then they will quickly shift to the other side.

It's not hard to understand, especially if you pay attention to even basic history.

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You assume that they are behind the other countries and will follow their model. However, even if that were true, China would institute its own regulations long before it could be convinced to sign ACTA, at which point its signature would be just as meaningless as other governments which have already taken a pro-copyright stance.

Of course, that may not be true. China has no incentive to generate its own copyright, patent and trademark laws when not doing so has left it financially dominant.

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"they are still a net CONSUMER of IP"

You are deluded. Try buying a TV, mobile phone or any other high tech gadget. Take note of what proportion of such devices are made in China. Do you seriously think that the local box-movers, that you bought your gadget from, had anything to do with the design? Those things are designed in China by Chinese engineers. Kindly acquaint yourself with the meaning of the word "shanzhai". The Chinese do not buy armaments from America. They design and make them locally. Do you imagine their armaments are in any way inferior?

The intellectual centre of elaborately transformed manufacture moved to China quite some time ago. The Chinese are not being damaged by IP law, due to the magic of selective enforcement. They know that, just fine. They are not about to shoot themselves in the foot like the silly Americans and their allies.

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Exactly. Chinese and Japanese engineers outrank U.S. engineers. A TON of innovation is occurring in these regions. Just read slashdot articles on new advancements, note where these advancements are being made, hardly any new advancements occur from the U.S. anymore unless it's occurring at (publicly funded) universities or at taxpayer expense.

The U.S. is lagging when it comes to innovation, badly. IP is a huge part of the reason for that. China doesn't need to steal our inventions, we're too busy fighting over them in court while they're busy innovating. It's not like we make anything (and sell to them) for them to even 'steal'.

Not to mention, many/most Chinese don't speak English and so it's not like they sit around reading our patents to learn anything from them. If you believe that you are truly deluded. How, exactly, do they infringe on our inventions and what inventions have they infringed on?

Language barriers are a huge barrier to having them simply steal our technology. You act like most Chinese overwhelmingly listen to American music. Sure, some do, and some listen to music from different parts of the world, just like some Americans listen to Spanish music, but just because most Americans may listen to American music hardly means most Chinese people listen to American music. Stop pretending that the Chinese don't and can't produce their own music to listen to, of course they can and, for the most part, they listen to it, just like any other country.

Of course China and India are reluctant to embrace a model such as stated in ACTA. It's all about trying to protect their economic turf, which in large measure comprises copying and vending products developed elsewhere.

This will likely change over time as their industries ramp up and begin developing their own unique products, but until then truly enforceable patent, copyright and trademark laws ill-serve their parochial interests.

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Of course China and India are reluctant to embrace a model such as stated in ACTA. It's all about trying to protect their economic turf, which in large measure comprises copying and vending products developed elsewhere.

This will likely change over time as their industries ramp up and begin developing their own unique products, but until then truly enforceable patent, copyright and trademark laws ill-serve their parochial interests.

Hmm - the same could be said of the US in the mid 19th century - and of the west coast of the US a little later.

The theme here seems to be that rapid growth goes with weak IP and strong IP goes with economic stagnation. Strip out the emotive and inaccurate language from your comment and it becomes clear what the sensible path actually is.

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China is on the rise. They are shooting way up from where they were. The problem? They were do far behind, that their massive growth still doesn't get them anywhere near the western world.

Average salary? About $3000 in US dollars - a year.

Much of China's innovation has been on the back of the US consumer, on the back of US inventions, and on the backs of US IP. Over time they are developing their own derivatives, but it only happens because they are able to ignore basic rules of copyrights, patents, and such.

As they grow, those rules will get stronger, when they realize that they have something worth protecting.

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"You are deluded. Try buying a TV, mobile phone or any other high tech gadget. Take note of what proportion of such devices are made in China. Do you seriously think that the local box-movers, that you bought your gadget from, had anything to do with the design? "

You miss the point - they are still net consumers, because they are only taking an idea from overseas, and sticking it in a box to sell you. They aren't producing IP, they are using it as part of their products.

China is only just now starting to get to the point of creating IP that is unique to them. Their meteoric rise hasn't been from hard research, as much as it has been from hard labor and recycling of other people's ideas, in exactly the same manner that Japan did it many years ago.

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"Exactly. Chinese and Japanese engineers outrank U.S. engineers. A TON of innovation is occurring in these regions. Just read slashdot articles on new advancements, note where these advancements are being made, hardly any new advancements occur from the U.S. anymore unless it's occurring at (publicly funded) universities or at taxpayer expense."

I think IBM and Intel would disagree. This could be the trend but it's probably not the current state.

"Not to mention, many/most Chinese don't speak English and so it's not like they sit around reading our patents to learn anything from them. If you believe that you are truly deluded. How, exactly, do they infringe on our inventions and what inventions have they infringed on?"

This isn't really true. Also, it's not like Americans / anybody sits around reading patents to learn anything from them, unless they are lawyers.

"Stop pretending that the Chinese don't and can't produce their own music to listen to, of course they can and, for the most part, they listen to it, just like any other country."

Re: Re: Re: Language Barriers

While you may be right about the language barriers for a large number of Chinese you're forgetting that English is commonly taught from elementary school on in Hong Kong and "mainland" Chinese wanting to get a technical or business degree from university have to be fluent in English to graduate.

So for those Chinese who matter, on issues of reading and investigating American and other patents and copyrights they are more than capable of doing so, if they want to. Then there's the old method of reverse engineering.

And then, like the Japanese and Koreans before them improving on what they find if they feel the need to look.

I agree with the view that there is little or no upside to the Chinese signing on to ACTA or TPP and all downside to it. While Brazil, India and Russia MAY sign on I expect that it will be largely ignored in those countries.

Again, it's a matter of cutting off your nose to spite your face.

The Chinese of places like Hong Kong, Beijing, Shanghai and other large cities are as cosmopolitan as other big cities on the planet such as, oh, places like New York City and Los Angeles.

Keeping the IP extremists of Europe and the United States and Canada happy isn't anywhere near as important as it was 10 or 15 years ago so why bother?

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Well, I know where you are going, but I would say you are wrong with some pretty simple logic:

What you are saying is that strong IP is slow growth, and weak IP is fast growth, right? Why is that?

The weaker / behind / backwards / 4th world countries (like China was a few decades ago) race ahead because there is an "ahead" to race to. They aren't massively innovative because they have weak IP and a sudden flurry of great new ideas, rather, they are cribbing from the "strong IP" side, and rapidly closing the gap.

At the point where the weaker country starts to catch up too closely, and perhaps starts to exceed the strong IP country, they too will become strong IP, because they no longer benefit as much from stealing from others, and instead feel the risk of being stolen from.

China's huge advances have been as a result of their cheap labor, and their willingness to take IP provided by companies getting products made in China, and using them for their own products. Methods and techniques for building, modern tools from outside of China have all been taken, used, taken apart, duplicated and in some cases improved, and uses as the economic club to beat the West into submission.

But without the stronger IP nations to crib off of, they just couldn't have done it, certainly not as quickly.

Stripping away IP protections doesn't for a moment suggest that we would see massive growth in the US. In the short run, their might be some Techdirt style "paint color" innovation, but in the end, without a higher bar being set, nobody is going to leech off of that better idea to get ahead - because the better idea might not be there.

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"While you may be right about the language barriers for a large number of Chinese you're forgetting that English is commonly taught from elementary school on in Hong Kong and "mainland" Chinese wanting to get a technical or business degree from university have to be fluent in English to graduate."

While this maybe true to an extent, language barriers still exist and translators are still needed to translate between Chinese and American company branches.

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"because they are only taking an idea from overseas, and sticking it in a box to sell you."

We don't produce any 'ideas' for them to take. What do you propose is happening, they are taking ideas from non-producing companies like Intellectual ventures and other patent trolls? Who do you think is more qualified to come up with good advancements and the ability to implement them, IP trolls that produce nothing, or those who are selling products?

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"Then there's the old method of reverse engineering."

and exactly what are they reverse engineering from us? What do we produce that's so advanced relative to what they can produce that they must reverse engineer it to build it? Frivolous patent lawsuits?

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"in exactly the same manner that Japan did it many years ago."

and look who's stealing ideas from Japan and not compensating them for what IP extremists would call their 'intellectual property'. Heck, there was just a post about QR codes, something that Americans now use like crazy but were developed in Japan.

It should also be noted that the founding fathers were very skeptical of IP and, as a result, early America mostly ignored foreign IP and was skeptical of IP, which is mostly why we advanced so quickly. The lack of IP allowed those who innovate to be rewarded for their innovations instead of allowing the status quo with no merit to simply get a state established monopoly on everything that anyone else might try, effectively hindering innovation.

So it's not like the ideas that Japan 'stole' or copied from us were developed from us as a result of IP, on the contrary, it was the lack of IP laws and their implementation that enabled us to better innovate. Much of the tech sector innovated exactly because much of it didn't pay much attention to IP, sure they got patents, but they mostly cross licensed and hardly ever sued each other over anything early on. and a lot of tech was developed without patents.

There is little to no evidence that IP has helped innovation, most of the evidence suggests the exact opposite, that without IP, innovation better progresses.

Most of the technologies you mention are not U.S. advancements, they were 'stolen' by the U.S.

Americans benefit from them and yet we don't even pay these foreign countries the monopoly prices that IP extremists would have everyone pay if some worthless American IP troll has a patent on something trivial.

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Uhh... Are you guys reprimanding me because I support "stealing" IP, because I largely benefit from it, or because I support China, because my country, The Philippines, is the greatest Pirate Market in Asia... and WE benefit from them goods smuggled from China? :/

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"they are cribbing from the "strong IP" side"

You mean they are taking resources from other countries, giving the natives in those countries little or nothing in return? Surely that doesn't happen anywhere... Not oil, nor iron nor sugar nor wild animals nor any manner of biological organisms nor timber nor diamonds nor child labour nor any other resource has been or is being plundered by the Americans or Europeans, surely.

Maybe the scope of ACTA should be expanded to ensure that the locals in every country receive fair compensation for the long term value of all their assets instead of focusing on IP. And maybe they should first fix the IP laws to the system isn't so easily abused, so that there is some justice in it.

From what I have heard (little, as the negotiations are all state secrets - I suppose the truth would threaten national security in any country in which these treaties are being discussed) ACTA and APP are so biased to US interests and offer so little to any other interests I can't understand why any other country is considering them, unless those involved are under undue influence from the interested parties in the US.

The US takes whatever it wants from the world and gives as little as possible, often nothing, in return. Have RIAA members compensated African governments for the music that is the roots of American blues and modern POP? Have the US pharmacuticals compensated south american countries for the organisms they have taken? Are foreigners to the US fairly compensated for their labour?

The US has the largest, most powerful military in the world and the US president says it will be used to ensure the US gets whatever the presidency deems beneficial to US interests and security. In other words, whatever the US wants, the US gets or bombs and viruses to you.